On Wall Street, War Is Not a Buy

Wall Street greeted the air strikes right after the close of trading
Wednesday with all the excitement of a mid-season basketball game, and
Thursday is about the same. "There was absolutely no sense of real worry or
panic when word started circulating in the markets yesterday," said one
floor trader. "People on the trading floor were taking bets on what time
the first air strike would occur." In fact, the markets were almost
relieved by the bombing of Iraq, since it delayed an impeachment vote and
has cast President Clinton in a strong leadership stance. Oil stocks that
spiked sharply at first soon settled back toward normal levels: After all,
world markets are overflowing with oil. "I don't even expect much more
movement in the stocks you historically see getting the most attention in
these situations, like energy companies or defense-related businesses,"
says Gail Dudack, Warburg Dillon Reed's chief investment strategist.

MONEY Daily's morning gut-check with top analysts and traders on Thursday
found them counseling "watch and wait," but not expecting anything
approaching a selling frenzy. All of that could change very quickly,
though, if U.S. troops become involved on the ground. For now, some traders
are taking some precautionary steps to get out of international stocks.
"We have been doing some swapping," says Hugh Johnson, First Albany's chief investment strategist. "We've sold some stocks
with big international exposure, like Dupont, ConAgra and Phillips
Petroleum, and have bought Staples and McGraw Hill. I'm trying to make our
portfolio a little more insulated from world events."